Corporate compliance officers, drop everything. We have a second speech from the Justice Department about corporate misconduct and compliance programs that needs your immediate attention.
Assistant attorney general Kenneth Polite gave the speech in Texas on Friday. It follows the speech that his boss, deputy attorney general Lisa Monaco, gave one day earlier in New York. Monaco announced several major policy shifts in how the Justice Department will prosecute corporate crime — but Polite’s speech goes into more detail about what the department’s Criminal Division will now want to see for culture of compliance, plus the new policy that chief compliance officers must certify the strength of their compliance programs as part of a corporate settlement.
Perhaps most notably, Polite said the Criminal Division is exploring ways to “shift the burden of corporate financial penalties away from shareholders — who in many cases do not have a role in misconduct — onto those more directly responsible.” He then continued:
In the coming months, our team will be meeting with, among others, our agency partners and experts on executive compensation, and gathering relevant data points. Based on these inputs, the Criminal Division will then provide further guidance on how prosecutors will consider and reward corporations that develop and apply compensation claw back policies.
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